NOURIEL ROUBINI BLOG tracks the media appearances of Dr Nouriel Roubini his interviews articles debates books news speeches conferences blogs etc..Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

Wednesday, April 30, 2014

Global Ground Zero in Asia By Nouriel Roubini

NEW YORK – The biggest geopolitical risk of our times is not a conflict between Israel and Iran over nuclear proliferation. Nor is it the risk of chronic disorder in an arc of instability that now runs from the Maghreb all the way to the Hindu Kush. It is not even the risk of Cold War II between Russia and the West over Ukraine.
All of these are serious risks, of course; but none is as serious as the challenge of sustaining the peaceful character of China’s rise. That is why it is particularly disturbing to hear Japanese and Chinese officials and analysts compare the countries’ bilateral relationship to that between Britain and Germany on the eve of World War I.
The disputes between China and several of its neighbors over disputed islands and maritime claims (starting with the conflict with Japan) are just the tip of the iceberg. As China becomes an even greater economic power, it will become increasingly dependent on shipping routes for its imports of energy, other inputs, and goods. This implies the need to develop a blue-water navy to ensure that China’s economy cannot be strangled by a maritime blockade.
But what China considers a defensive imperative could be perceived as aggressive and expansionist by its neighbors and the United States. And what looks like a defensive imperative to the US and its Asian allies – building further military capacity in the region to manage China’s rise – could be perceived by China as an aggressive attempt to contain it.
Historically, whenever a new great power has emerged and faced an existing power, military conflict has ensued. The inability to accommodate Germany’s rise led to two world wars in the twentieth century; Japan’s confrontation with another Pacific power – the US – brought World War II to Asia.
Of course, there are no iron laws of history: China and its interlocutors are not fated to repeat the past. Trade, investment, and diplomacy may defuse rising tensions. But will they?
Europe’s great powers finally tired of slaughtering one another. Facing a shared threat from the Soviet bloc and US prodding, European countries created institutions to promote peace and cooperation, leading to economic and monetary union, now a banking union, and possibly in the future a fiscal and political union.
But no such institutions exist in Asia, where long-standing historical grievances among China, Japan, Korea, India, and other countries remain open wounds. Even two of America’s most important allies – Japan and South Korea – find themselves in a bitter dispute about the Korean “comfort women” forced to work in Japanese military brothels before and during World War II, despite an official apology from Japan 20 years ago.
Why are such tensions among Asia’s great powers becoming more serious, and why now?
For starters, Asia’s powers have recently elected or are poised to elect leaders who are more nationalistic than their predecessors. Japanese Prime Minister Shinzo Abe, Chinese President Xi Jinping, South Korean President Park Geun-hye, and Narendra Modi, who is likely to be India’s next prime minister, all fall into this category.
Second, all of these leaders now face massive challenges stemming from the need for structural reforms to sustain satisfactory growth rates in the face of global economic forces that are disrupting old models. Different types of structural reforms are crucially important in China, Japan, India, Korea, and Indonesia. If leaders in one or more of these countries were to fail on the economic front, they could feel politically constrained to shift the blame onto foreign “enemies.”
Read more at http://www.project-syndicate.org/commentary/nouriel-roubini-says-that-if-the-the-global-order-blows-up--the-detonation-will-occur-in-asia#jVO530xoUmmuOgt6.99

Nouriel Roubini is an American professor of Economics at New York University`s Stern School of Business and chairman of RGE Roubini Global Economics

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Nouriel Roubini, (born March 29, 1958, Istanbul, Turkey), Turkish-born American economist and educator who was best known for predicting the 2007–08 subprime mortgage crisis in the United States and the subsequent global financial crisis.

Born to Iranian Jewish parents, Roubini moved with his family to Iran and Israel before they settled in Italy in 1962. After a year at Hebrew University of Jerusalem, he studied economics at Bocconi University in Milan (B.A., 1982) and Harvard University (Ph.D., 1988), where he specialized in macroeconomics and international economics. He joined the economics faculty at Yale University in 1988 and taught there until 1995, when he moved to New York University. He also served as a visiting scholar to the International Monetary Fund (IMF), was a research associate with the National Bureau of Economic Research (NBER), held single-year terms on the White House Council of Economic Advisers (1998–99) and at the U.S. Department of the Treasury (1999–2000), and cofounded (2004) the consulting firm Roubini Global Economics. Roubini spent much of his early career studying countries that experienced extreme economic failures, such as Mexico (in 1994), Thailand and other countries associated with the 1997 Asian financial crisis, Russia (1998), and Argentina (2000). He determined that each shared one common element: a massive current account deficit.(www.britannica.com)

Roubini Quote : "The Treasury plan is a disgrace: a bailout of reckless bankers, lenders and investors that provides little direct debt relief to borrowers and financially stressed households and that will come at a very high cost to the US taxpayer. And the plan does nothing to resolve the severe stress in money markets and interbank markets that are now close to a systemic meltdown. "

Nouriel Roubini is the Chairman and CEO of Roubini Macro Associates, LLC, his own global macroeconomic consultancy firm. He is also a professor of economics at New York University’s Stern School of Business. Dr. Roubini has extensive policy experience as well as broad academic credentials. From 1998 to 2000, he served as the senior economist for international affairs on the White House Council of Economic Advisors and then the senior advisor to the undersecretary for international affairs at the U.S. Treasury Department, helping to resolve the Asian and global financial crises, among other issues. The International Monetary Fund, the World Bank and numerous other prominent public and private institutions have drawn upon his consulting expertise.

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